concerns this sector of banking services, continued to decline and made 69.8 % as compared with 73.% in the beginning of the year (without taking into account the funds related to card accounts). The process of decline in the Sberbank share was relatively even (see Fig. 2), i.e. the reduction of rates related to Ruble and forex denominated deposits carried out by Sberbank in August did not significantly affected depositors’ behavior. Outside Sberbank, about 8 % of household deposits are made with Alfa Bank, while Bank of Moscow, which practically doubled the amount of attracted household deposits over the three quarters of 2002, concentrates 5.6 % of market.

Fig. 1. The rate of growth in household assets and deposits in comparable prices without Sberbank (quarter on quarter change, in %)) % Estimated on the basis of data provided by STIiK.

Fig. 2. The share of Sberbank in the total amount of household deposits in Household deposits play a greater role in balance sheets of regional banks (see Table 1): on the average, the share of household deposits in the liabilities of these banks was two times higher than in Moscow-based banks and almost 90 % of regional banks attract household deposits (in the capital the respective indicator makes only 83 %). At the same time, due to the high concentration of banks in Moscow their share in the total amount of household deposits made 62.5 % by late September of 2002.

In the first nine months of 200w, the Moscow-based banks have incresed the total amount of attracted household deposits by 55 % - from Rub. 110 billion to Rub. 169 billion. The amount of household deposits in regional banks has increased by 52 % (from Rub. 69 billion to Rub. 102 billion).

However, Moscow and regional banks significantly differ in terms of currency of household deposits. While the share of forex denominated household deposits in Moscow banks stable dominates making about 80 %, in regional banks this ratio is different: forex denominated household deposits make slightly over 40 % of the total amount of household deposits. At the same time, as the data presented in Table 2 demonstrate, after a decline registered in 2000 and 2001, in 2002 there was observed a certain increase in the share of forex denominated deposits in comparison with Ruble denominated deposits (the sample does not include Sberbank). As concerns Sberbank, there the attraction of household forex denominated deposits continued to outpace the increase in Ruble denominated deposits.

As concerns the time structure of household deposits in 2002, it has significantly changed in comparison with the situation in the beginning of the year (see Table 3). In 2002, there continued an increase in the share of fixed deposits, while the share of demand deposits declined respectively. The share of demand deposits decreased from 23 % to 19 % across all banks over the first 3 quarters (without Sberbank). As the data presented in Table 3 demonstrate, a high share of demand deposits in this sample is determined by the extremely high share of Ruble denominated demand household deposits in commercial banks.

As in the preceding year, time deposits with Sberbank are made for longer terms. Deposits termed for more than a year dominate in Sberbank. The structure of Sberbank deposits affects the time structure of deposits in aggregate balances of banks: the share of the amount of funds deposited for this term is the largest (32.8 %). However, without Sberbank, the most popular Ruble and forex denominated deposits are those termed from 6 to 12 months. At the same time, this term also dominates the forex denominated deposits with Sberbank (see Table 3).

L. V. Mikhailov, L. I. Sycheva, E. V. Timofeev An Analysis of Military and Related Expenditures of the Federal Budget for It seems feasible to begin the traditional analysis of planned military expenditures with an analysis of their validity. Moreover, as it will be shown below, these expenditures for 2003 became more transparent. Thus, it is natural to find out if the substantiation of the expenditures is also open.

As concerns the “Prognosis of social and economic development of the Russian Federation in 2003,” which was submitted to the State Duma as a part of the package of documents supplemented to the federal budget for 2003 (FB-03), it contains Section 8 entitled “Economic Aspects of National Security.” However, the subject matter of the section does not answer its title. The section, contrary to the Concept of the RF National Security, focuses on threats and risks related to national security only in the sphere of civilian economy. The section fails to take into account economic aspects of neutralization of other threats and risks.

As a result, the feasibility of planned expenditures included in some most important sections of FB03 is absolutely unsubstantiated. This lack of substantiation of military expenditures in the federal budget can not be explained by references to secrecy requirements, since the national security concept This article was prepared with assistance of RGNF (Project No. 02-02-00062) of the Russian Federation clearly defines all threats to the Russia’s national interests without classifying them as military and non-military threats, while the necessity of economic substantiation of measures aimed at parrying the totality of all threats and minimization of expenditures were listed as priority requirements.

The present approach to the prognostication of economy and substantiation of the budget without mentioning military needs of the state, which have not changed since the Soviet times, hampers the possibility to evaluate the rationality of the levels of federal budget expenditures earmarked for the ensuring of military security.

No elaboration of the “Prognosis of social and economic development of the Russian Federation in 2003” was carried out in the process of preparation and approval of FB-03.

The structure of military expenditures is determined by the budget classifier, which has routinely underwent non-motivated changes. Although the military organization of the state was defined by the Military Doctrine and a number of other documents, these definitions were not used in the budget.

There are no clear criteria of military expenditures.

Yet another substantial drawback resulting from the annual changes in the structure of expenditures is related to the impossibility to precisely evaluate their dynamics. Therefore, the assesments of the dynamics of expenditures shown below are approximate. Since no motives behind the changes in the classifier are available, the impression is that certain forces in the state are not interested in a precise analysis of budgetary dynamics.

The bulk of military expenditures in the RF concentrates in sections “National Defense” and “Law Enforcement and State Security.” “Military Reform” is a composite section as concerns its functional subject matter. On the one hand, it reflects expenditures earmarked for the continuing reduction of the size of the RF military organization, on the other hand, this section includes more and more expenditures aimed at the improvement and strengthening of the military organization.

As concerns section “National Defense,” for the results of the analysis of the federal budget for year 2003 in comparison with respective expenditures of the federal budget for year 2002 (FB-02), see Table 1. Sources of information include: Supplement No. 6 to FB-03 and Supplement No. 5 to FB-02.

Expenditures (in Rub. millions) presented in FB-03 are shown in normal fonts, while their values as adjusted for estimated inflation (11 %) in comparison with price levels registered in 2002 are presented in italics. The difference between levels of expenditures was calculated in prices of 2002.

The share of expenditures was evaluated in relation to the aggregate expenditures (RFB) in FB-03 and estimated size of GDP in FB-03.

The expenditures included in section “Law Enforcement and State Security” were increased to a much greater extent (by 26.8 % in relative values, including a 35.5 % increase of expenditures for state security, or, in comparable prices adjusted for inflation by 24.1 % and 32 % respectively). At the same time, the share expenditures for item 05 has increased from 1.7 % to 1.9 % of GDP. No substantiation of this increase was presented.

As concerns expenditures included in this section, it shall be noted that expenditures for so called “other troops” being a part of the RF military organization and financed from this section have also increased. For the analysis of these expenditures, see the upper part of Table 2.

The RF government also paid certain attention to other components of the RF military organization.

The major outlays are presented in the lower part of Table 2.

The sources of information used for the analysis of these expenditures shown in respective rows of Tables 2 and 3 are as follows: